Economic Threat of Coal Plants Rises

August 14, 2008

Economic Threat of Coal Plants Rises

Carbon Legislation is Coming, and It’s Expensive

AUSTIN▬ The Texas PUC’s (Public Utility Commission) acknowledgement this week that coal-fired power plants will cost more due to impending national carbon legislation greatly diminishes the only benefit coal power had going for it: The claims that it was “cheap,” Public Citizen said today.

On Tuesday, the PUC said that costs associated with national carbon legislation – which would put a price tag on the carbon dioxide emissions from coal plants – could range from as low as $13 a ton to as much as $70 a ton annually, and perhaps go even higher. The PUC anticipates that the average annual cost will be between $30 to $45 a ton. Although the PUC recently granted a Certificate of Convenience and Necessity to AEP/SWEPCO’s Turk plant in southwestern Arkansas, this company will not be allowed to pass on the high carbon mitigation costs to Texas ratepayers.

This will greatly increase the operating cost of the plant, resulting in even higher rates for consumers in other states such as Arkansas. Other increasing costs include construction materials and transportation, making coal an even less attractive investment. It is a positive step that the Texas PUC acknowledges these impending costs and is taking steps to protect Texas consumers from these new financial burdens.

Further, PNM Resources just announced that it will not expand its Twin Oaks facility in Robertson County, Texas. The company did not state a reason for its change of plans but it is likely that the looming threat of carbon cost factored into the decision.

“This increased coal price tag will finally reflect some of the hidden costs of coal-fired power generation largely ignored for over the past hundred years,” says Ryan Rittenhouse, an organizer with Public Citizen. “We are now forced to address these costs due to climate change, and carbon taxes will show that ‘cheap coal’ is anything but. We must move to renewable energy sources such as wind and solar, and do it immediately.”

The following is a list of recent or proposed coal plants in Texas with the added annual cost of carbon legislation at $35 a ton, based on available information about C02 emissions:

TXU, Oak Grove: $581 mil/year
CPS, Spruce: $259 mil/year
Dynegy, Sandy Creek: $263 mil/year  
Formosa & Calhoun Co.: $196 mil/year
TXU, Sandow: $189 mil/year  
NRG, Limestone: $259 mil/year
Int. Power, Coleto Creek: $210 mil/year 
Las Brisas: $364 mil/year
Tenaska (w/ carbon capture): $26 mil/year

Total – $2.347 billion/year

Additional carbon dioxide emissions from the 19 older plants in Texas would amount to $8 billion at the average carbon tax of $35 a ton every year, Public Citizen estimates. Including the plants listed above, the total annual price tag of Texas coal plants would be more than $10 billion per year.

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